At a Glance

When it comes to financial matters, creditworthiness plays a crucial role. Lenders and financial institutions evaluate individuals based on their credit history and credit score. Although related, credit history and credit score are distinct aspects that lenders consider when making lending decisions. This article aims to provide a clear understanding of the differences between credit scores and credit history, how they are calculated, their importance, and how the length of credit history affects credit scores.

In this article, you’ll learn:


128 Months

(or 10 and a half years) is the average length of credit history for people with 800+ FICO Scores.

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Credit history vs. credit score

Credit history is a detailed record of an individual’s borrowing and repayment activities. It includes information about credit accounts, loans, and payment history. Credit history provides a comprehensive overview of how responsible an individual has managed their credit obligations over time.

On the other hand, a credit score is a numerical representation of an individual’s creditworthiness. It is a three-digit number that summarizes the information in a credit report and helps lenders assess the risk associated with extending credit to a borrower. Credit scores are generated by credit scoring models, such as the FICO Score or VantageScore, using complex algorithms that consider various factors from a person’s credit history.

How is credit history calculated?

Credit history is calculated based on the information contained in an individual’s credit report. This report is compiled by credit bureaus, which gather data from lenders, creditors, and public records. The key elements that influence credit history include:

  • Payment history: Timely payment of credit card bills, loans, and other debts positively impacts credit history.
  • Credit utilization: The amount of available credit a person uses compared to their total credit limit affects their credit history. Lower credit utilization ratios are generally considered favorable.
  • Length of credit history: The longer an individual has had credit accounts, the more established their credit history becomes.
  • Types of credit: A diverse mix of credit, such as credit cards, mortgages, and auto loans, can contribute positively to credit history.
  • Public records: Bankruptcies, liens, or court judgments can harm credit history.

How is credit score calculated?

Credit scores are determined using mathematical models that analyze the information in a person’s credit report. While the specific algorithms used by credit scoring models are proprietary, some common factors that affect credit scores include:

  • Payment history: Consistently making on-time payments positively affects credit scores.
  • Credit utilization: Lower credit utilization ratios are generally associated with higher credit scores.
  • Length of credit history: A longer credit history often leads to higher credit scores.
  • Credit mix: Having a mix of different types of credit accounts, such as credit cards and loans, can contribute positively to credit scores.
  • New credit applications: Frequent credit applications within a short period can negatively impact credit scores.

Learn more: How is Your Credit Score Calculated?

Which is more important; credit history or credit score?

Both credit history and credit scores are important factors for lenders, but their significance may vary depending on the situation. Credit history provides a comprehensive view of an individual’s financial habits and payment patterns, offering insight into their reliability as a borrower. On the other hand, credit scores condense this information into a single number that lenders can use to quickly assess creditworthiness.

While credit history is crucial for evaluating an individual’s overall financial responsibility, credit scores are often the primary consideration for lenders when making lending decisions. A higher credit score indicates lower risk, making it more likely for lenders to offer favorable loan terms or approve credit applications.

How does the length of your credit history affect your credit score?

The length of credit history is an important factor in credit scoring models. Generally, a longer credit history is more favorable because it provides a more extensive record of an individual’s financial behavior. Lenders can evaluate a borrower’s creditworthiness based on how they have managed credit obligations over an extended period.

Individuals with longer credit histories tend to have higher credit scores, provided their credit management has been responsible. This is because a lengthier credit history demonstrates stability and consistency in managing credit over time. Conversely, individuals with limited credit history may have lower credit scores due to insufficient data for evaluation.

Learn more: How Length of Credit History Affects Credit

What is your score if you don’t have a credit history?

If you don’t have a credit history, it can be challenging for lenders to assess your creditworthiness. Without any credit accounts or borrowing activity, there is little information available to generate a credit score. In such cases, you may be considered “credit invisible.”

Building credit without a credit history requires proactive steps, such as obtaining a secured credit card, becoming an authorized user on someone else’s credit card, or applying for a credit-builder loan. These strategies can help you establish a credit history and eventually generate a credit score.


Lenders typically consider both credit history and credit scores when evaluating loan applications. While credit history provides a detailed account of an individual’s financial behavior, credit scores offer a quick numerical representation of creditworthiness. Both factors play a role in determining loan approvals and terms.

Building credit without a credit history requires starting from scratch. Consider obtaining a secured credit card, becoming an authorized user on someone else’s credit card, or applying for a credit-builder loan. Making timely payments and responsible credit management will help you establish a positive credit history.

Payment history is an essential component of credit history, but credit history encompasses more than just payment patterns. It includes information about credit accounts, loans, credit utilization, length of credit history, and other factors that collectively reflect an individual’s creditworthiness. Payment history is a significant factor that influences credit history and credit scores.